Shephard v. Loyola Marymount University

Opinion

I. Introduction

Plaintiff, Kisha Shephard, appeals from a summary judgment entered in favor of defendants, Loyola Marymount University (the school) and Julie Wilhoit, on a complaint for race discrimination and breach of oral contract. The lawsuit arose out of the school’s refusal to renew plaintiffs athletic

Defendants answered the complaint and moved for summary judgment. In the summary judgment motion, which was filed January 25, 2001, defendants argued summary judgment was required because plaintiff was not entitled to damages under the FEHA because she was not a school employee.

A. Standard of Review of an Order Granting Summary Judgment on the Merits

In Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826 , 850-851 [ 107 Cal.Rptr.2d 841 , 24 P.3d 493 ], the Supreme Court described the burden of production on summary judgment motions as follows: “[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court’s action in his favor bears the burden of persuasion thereon. [Citation.] There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. ... [10 [T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. ... A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]” (Fns. omitted.)

We review the trial court’s decision to grant the summary judgment de novo. (Johnson v. City of Loma Linda (2000) 24 Cal.4th 61 , 65-66, 67-68

B. Plaintiff Was Not an Employee for FEHA Purposes

Plaintiff contends the trial court erroneously found her FEHA claim was without merit because triable issues of material fact existed as to whether she was a school employee. The FEHA prohibits employment discrimination on certain enumerated classifications, one of which is on the basis of race. (§§ 12920, 12926, 12940.) The FEHA provides limited definitions of the terms “employee” and “employer.” (§ 12926, subds. (c) & (d).) Section 12926, subdivision (c) states, “ ‘Employee’ does not include any individual employed by his or her parents, spouse or child, or any individual employed under a special license in a nonprofit sheltered workshop or rehabilitation facility.” As can be noted, section 12926, subdivision (c) only provides a description of what is not an employee. Employer is defined as follows: “ ‘Employer’ includes any person regularly employing five or more persons, or any person acting as an agent of an employer, directly or indirectly, the state or any political civil subdivision of the state, and cities, except as follows: [f] ‘Employer’ does not include a religious association or corporation not organized for private profit.” (§ 12926, subd. (d).) The first paragraph of section 12926, subdivision (d) does provide some definition of an employer. But the second paragraph of section 12926, subdivision (d) provides a description of what is not an employer. Beyond these limited definitions, the FEHA does not define an employer, employee, or what constitutes employment. In order to recover under the discrimination in employment provisions of the FEHA, the aggrieved plaintiff must be an employee. No decisional authority has addressed the specific issue of whether a student athlete who receives an athletic scholarship is a school employee under the FEHA.

However, persuasive decisional authority in the workers’ compensation and public entity liability contexts provides guidance as to the meaning of the term “employee.” Labor Code section 3352, subdivision (k) excludes a student athlete receiving an athletic scholarship from the term “employee.” What is now Labor Code section 3352, subdivision (k), resulted from the Court of Appeal decision in Van Horn v. Industrial Acc. Com. (1963) 219

In 1965, in response to Van Horn, the Legislature amended Labor Code section 3352 to add former subdivision (j) to exclude athletic participants as employees. As originally adopted, the exclusion of scholarship athletes from the definition of the term “employee” was as follows, in former Labor Code section 3352, subdivision (j): ‘ “Employee’ excludes: [i] • • • [10 0) Any person, other than a regular employee, participating in sports or athletics who receives no compensation for such participation other than the use of athletic equipment, uniforms, transportation, travel, meals, lodgings or other expenses incidental thereto.” (Stats. 1965, ch. 1791, § 1, pp. 4127-4128; see Graczyk v. Workers’ Comp. Appeals Bd. (1986) 184 Cal.App.3d 997 , 1002, 1005-1006 [ 229 Cal.Rptr. 494 ] [detailing legislative amendments to Lab. Code, § 3352 since the Van Horn decision to “clarify the exclusion of athletic participants” as employees] (Graczyk).) The purpose of the 1965 amendment was described as follows: “[The] amendment evidenced an intent on the part of the Legislature to prevent the student-athlete from being considered an employee of an educational institution for any purpose which could result in financial liability on the part of the university.” (Townsend v. State of California (1987) 191 Cal.App.3d 1530 , 1537 [ 237 Cal.Rptr. 146 ] (Townsend); Graczyk, supra, 184 Cal.App.3d at pp. 1002, 1005-1006.) Labor Code section 3352, subdivision (j), the original student athlete exclusion from the scope of the term “employee,” was later recodified and is now

In Townsend, supra, 191 Cal.App.3d at pages 1534-1537, the Court of Appeal extended the Graczyk analysis from the workers’ compensation context to a claim under the Tort Claims Act. (§ 810 et seq.) The facts in Townsend were as follows: “In a varsity basketball game between the University of California at Los Angeles (UCLA) and San Jose State University (San Jose State), a player for San Jose State, Ronald Lowe, [viciously] struck a UCLA player, Raymond Townsend, with his fists and inflicted physical injury. In a personal injury action filed by Townsend against Lowe and various other defendants, a jury awarded Townsend $25,000 as against Lowe, [f] Before the matter was submitted to the jury, however, the trial court determined as a matter of law that defendant Lowe was not an employee of the State of California (State) and thus Townsend could not recover under the doctrine of respondeat superior against the other named defendants, i.e., the State, the athletic director and the coach at San Jose State.” (Townsend, supra, 191 Cal.App.3d at p. 1532.) Townsend concluded that liability could not be imposed against the state because as a matter of law Mr. Lowe, the student athlete who struck the plaintiff, was not an “employee” of San Jose State University. (Id. at pp. 1534-1537.) In so holding, Townsend relied on the Legislature’s clear intent in amending Labor Code section 3352 following Van Horn to exclude a student athlete from the definition of an employee. (Townsend, supra, 191 Cal.App.3d at pp. 1535-1537.) Townsend concluded that the determination of whether a student is an employee does not rest upon whether a student athlete is on scholarship and attending a private or public institution. (Id. at pp. 1534, 1537.) Townsend stated: “It is a matter of common knowledge that colleges and universities in California, in varying degrees, maintain athletic programs which include a number of sports, such as golf, tennis, swimming, track, baseball, gymnastics and wrestling. It is also well known that of all the various sports programs, at least in California, only two, i.e., basketball arid football, generate significant revenue. These revenues in turn support the other non-revenue producing programs. [^[] Thus, conceptually, the colleges and universities maintaining these athletic programs are not in the ‘business’ of playing football or basketball any more than they are in the ‘business’ of golf, tennis, or swimming. Football and basketball are simply part of an integrated multisport program which is part of the education process.

Furthermore, the National Collegiate Athletic Association (NCAA) constitution and bylaws were explicitly incorporated by reference into the financial aid agreements executed by plaintiff. These rules clearly provide that plaintiff was not a school employee. Article 2.9 of the NCAA Constitution provides, “Student-athletes shall be amateurs in intercollegiate sport, and their participation should be motivated by education and by the physical, mental and social benefits to be derived. Student participation in intercollegiate athletics is an avocation . . . .” NCAA Bylaws, article 12.01.1 provides, “Only an amateur student-athlete is eligible for intercollegiate athletics participation in a particular sport.” NCAA Bylaws, article 12.01.4 provides, “A grant-in-aid administered by an educational institution is not considered to be pay or the promise to pay for athletic skill, provided it does not exceed the financial aid limitations set the Association’s membership.” NCAA Bylaws, article 12.02.2 defines “pay” as follows: “Pay is the receipt of funds, awards or benefits not permitted by the governing legislation of the Association for participation in athletics.” NCAA Bylaws, article 15.02.4.1 defines “scholarships” and “grants” as financial aid. NCAA Bylaws, article 12.02.3 defines a professional athlete as follows: “A professional athlete is one who receives any kind of payment, directly or indirectly for athletics participation except as permitted by the governing legislation of the Association.” Under these standards, plaintiff’s argument that she received compensation would have rendered her ineligible to play. Moreover, plaintiff signed the financial aid agreements, which specifically characterized the aid and scholarships as neither pay nor a promise to pay.

Although not dispositive, as defendants point out, both federal and California income tax statutes specifically exclude “qualified scholarships” from gross income. ( 26 U.S.C. § 117 (a) [“Gross income does not include any amount received as a qualified scholarship by an individual who is a candidate for a degree at an educational organization”]; Rev. & Tax. Code, § 17131 [“Part III of Subchapter B of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to items that are specifically excluded from gross income, shall apply, except as otherwise provided.” (Fn. omitted.)].)

Finally, the application of traditional statutory construction principles warrants the conclusion that a student athlete is not a school employee. Statutes relating to the same subject matter must be harmonized insofar

One additional thought is relevant to terms of statutory construction issues. Statutes are to be construed so as to avoid absurd or unreasonable results. (Diamond Multimedia Systems, Inc. v. Superior Court (1999) 19 Cal.4th 1036 , 1047 [ 80 Cal.Rptr.2d 828 , 968 P.2d 539 ]; California School Employees Assn. v. Governing Board (1994) 8 Cal.4th 333 , 340 [ 33 Cal.Rptr.2d 109 , 878 P.2d 1321 ].) To adopt plaintiffs construction of the FEHA, one that specifically eschews the application of Labor Code section 3352, subdivision (k), would lead to an absurd or unreasonable result. Under plaintiffs construction, a student athlete would be an employee for purposes of the FEHA. But a student athlete would not be an employee for purposes of workers’ compensation benefits or government tort liability.